Netflix shares rise 12% after the company said the number of paid subscribers increased by 8.5 million in the holiday quarter, with cold weather and new blockages
- Netflix said on Tuesday that it added 8.5 million new subscribers in the holiday quarter
- Originals like Bridgerton and The Queen’s Gambit helped boost growth
- The jump came when many were taking shelter in a colder climate
- Netflix shares rose 12% on Tuesday’s trading session
Netflix’s shares soared on Tuesday after the streaming company reported a jump in new subscribers for the holiday quarter, exceeding Wall Street estimates.
The company said it added 8.51 million paid subscribers during the quarter ended December 31, exceeding analyst estimates of 6.1 million, according to data from Refinitiv’s IBES.
It marked a major recovery in subscriber growth after a slow third quarter, in which Netflix added just 2.2 million paid users.
In the fourth quarter, Netflix originals like Bridgerton and The Queen’s Gambit helped the service to attract more viewers, many of whom were sheltering at home due to the new restrictions on COVID-19 and as winter came.
Netflix admitted in a letter to shareholders that it faces increasing competition and said it would continue to pour money into originals like ‘Bridgerton’ (above)
The growth of subscribers per year is seen in this chart released by Netflix on Tuesday
Netflix shares jumped as much as 12 percent on Tuesday’s trading session
Netflix’s shares jumped up to 12 percent on Tuesday’s trading session, when quarterly results were announced.
This marked the latest turnaround in ‘Streaming Wars’, with Netflix recognizing in a letter to shareholders that it faces fierce competition from HBO Max, Disney + and others.
“The huge growth in streaming entertainment has led traditional competitors like Disney, WarnerMedia and Discovery to compete with us in new ways, which we had hoped for many years,” said the letter.
‘This is partly why we have moved so quickly to further grow and strengthen our library of original content across a wide range of genres and nations.’
Netflix now has 203 million paid subscribers worldwide, against Disney + with 86.8 million global subscribers.
In the fourth quarter, Netflix originals like ‘The Queen’s Gambit’ (above) helped the service attract more viewers who were housed at home
HBO Max reports 38 million ‘activations’ in the U.S., but that number includes 12.7 million who already pay for content through their cable package.
Netflix reported revenue of $ 6.64 billion in the fourth quarter on Tuesday, exceeding expectations.
Earnings per share were $ 1.19, lower than the $ 1.39 that analysts had expected.
Netflix said it will no longer need to raise external financing for day-to-day operations and will even explore the return on cash to shareholders through the repurchase of shares.
The last time Netflix sought buybacks was in 2011, when it switched from DVDs by mail to streaming.